Updated 2016 Savings/Financial Goals

Still working on our goal planning, some changes since I last posted.

Definite goals:
(1) Max out 401k for each of us, the limits have not changes for 2016 so that is $18,000 for each of us for a total of $36,000. Automatic payroll debits are in place, I will just need to check them in January
(2) Finish funding our 2015 IRAs - $8900, The 2015 IRAs must be funded by 4/15/16. As such, we will have some heavy upfront savings of about $1110 per pay period between 1/1/16 and 4/15/16.
(3) Fund 2016 IRAs $11,000 for the both of us, this number also is unchanged from 2015.
(4) Baby Sam'college fund, add another $5000 this year.

Tentative goals:
(5) Add to emergency fund, reducing this annual goal to $5000 (this year we saved $10,000)

The above savings goals total $65,900.  The highest savings number we have ever hit with our savings efforts is @$64,000 (back in 2013). So, this would be a stretch for us, especially with our child care expenses for Baby Sam.

I've deleted the nused car savings goal, because I went ahead and bought a nused car in December.  More on that in a later post.

Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $4261 (this was at $6500 in my last post, we've made progress).
(2) Pay off Mr. Sam's new car, remaining debt $2000.

Above debt totals at $6261.

Also, I'd like to reduce our total debt to under $450,000 total.  At present our debt total is at $491,863 (this number went up due to the nused car) which would require killing the above credit and car debt and also killing another almost $35,602 in debt. I think that is this is may be a reachable goal since we paid off @$34,000 in debt this year.

Additional financial goals:
Roll over old 401k to my current employer 401k.  This has been a previous goal, and guess what it is still an item on my to do list.

2016 Savings/Financial Planning

Starting to think about 2016 savings and financial goals.

Definite goals:
(1) Max out 401k for each of us, the limits have not changes for 2016 so that is $18,000 for each of us for a total of $36,000. Automatic payroll debits are in place, I will just need to check them in January
(2) Finish funding our 2015 IRAs - $8900, The 2015 IRAs must be funded by 4/15/16. As such, we will have some heavy upfront savings of about $1110 per pay period between 1/1/16 and 4/15/16.
(3) Fund 2016 IRAs $11,000 for the both of us, this number also is unchanged from 2015.
(4) Baby Sam'college fund, add another $5000 this year.

Tentative goals:
(5) Add to emergency fund, reducing this annual goal to $5000 (this year we saved $10,000)
(6) Save for a nused car for me $10,000.  My car will be 10 years old next year and its got some expensive repairs that I've been holding off on. I replaced my last car after 9 years of life so I'm thinking this car will need replacing soon.

The above savings goals total $75,900.  The highest savings number we have ever hit with our savings efforts is @$64,000 (back in 2013). So, this would be a big stretch for us, especially with our child care expenses for Baby Sam.

Debt killing goals:
(1) Pay off lingering credit card debt in the amount of $6500.
(2) Pay off Mr. Sam's new car, remaining debt $2500.

Above debt totals at $9000.

Also, I'd like to reduce our total debt to under $450,000 total.  At present our debt total is at $484,848 which would require killing the above credit and car debt and also killing another almost $26,000 in debt. I think that is this is a reachable goal since we paid off @$34,000 in debt this year.

End of the Year Updates

Well it is December 1, 2015 and I still never got my 2015 savings/debt killing Excel spreadsheet chart from Mr. Sam.  It has been that kind of year, new baby, maternity leave, new baby expenses, balancing work with new baby, child care expenses, etc.  We also converted a rental property to a family property which brought along a ton of expenses as well.

These were my goals from May of this year, posted on one of the other personal finance sites:

(1) Max out 401ks: Goal $36,000
(2) Max out IRAs: Goal $11,000
(3) College fund for Baby Sam: Goal $5,000
(4) Add to emergency fund: Goal $10,000
(4) Pay off baby debt:  Goal $0, started with $7000
(5) Pay off Mr. Sam's truck loan: Goal $0. started with $7500
(6) Save for nused car for me: Goal is $20,000. This is two year goal, so this year's goal is $10,000)
(7) Get total debt under $500,000: $519,000 was thestart of the year number, goal is $499,000, difference of $20,000

Savings goal of $72,000 and
Debt killing goal of $34,500.

So let's start with the bad news.  We only put away $2100 for our 2015 IRAs, we can continue to invest for 2015 until April 15, 2016 so we have some time next year to finish this goal.

Baby debt, well it really morphed into debt, we have rental property conversion debt, some baby debt and just other cr_p debt that popped up this year since our finances were pretty crazy this year.  At present, the misc. credit card debt is $6275.  Can we kill it by year end?  Maybe, but doubtful.  But, I am working on it with renewed focus.

Nused car for me, didn't really happen at all this year,  I put away $400 and that is it.  I did spend some money on the car this year, about $1500 in repairs and the mechanic says I have about $4000 in repairs that could be done but were not necessary at the time.  Need to work on this goal in 2016 as the time is coming, car will be 10 years old as of next year.

The good news, we are on track to max out our 401ks by the end of the year.  At present we are at $33,009 and we will complete the $36,000 goal.

College fund for Baby Sam, we hit this goal as well and we have $5,781 in the 529 plan.  About half of that was from us and the other half from family as we have asked for 529 contributions in lieu of gifts for birthdays, Christmas, etc.

Emergency fund, we are also on track for hitting this goal.  We will have an additional $10,000 into the e/r fund by end of year.  At present we have $19,215 in our e/r fund which sounds like a lot, but it really isn't when you take into account our investment properties.  We have been working on rebuilding our fund after buying Mr. Sam's truck (we paid half in cash) and our IVF, pregnancy and birth expenses.  I've never really figured out how much I want in the e/r fund, but I'd be more comfortable closer to $30,000.  We do have $20,000 in other short term, liquid savings, for things like insurance, taxes, vacations, etc.  So that money is also available if we really got in a jam.

Mr. Sam's truck, we are paying $500 a month, 0% loan and at present we have a $2500 balance.  No current plan to pay ahead, but will be paid off early next year.

And as for getting our debt under $500,000, we easily hit that goal with $34,152 in debt paid off (even including the debts we added during the year).  Our present debt number is $484,848.

So grand, estimated, total for 2015 savings will be:  $53,881  (falling short by $18,119 of our 2015 goals).

And, grand, estimated, debt killing total for 2015 will be:  $34,152 (which does not include additional debt payments that I plan to make) so we basically hit that goal.

Thoughts, how did your 2015 financial year go?  What are you planning for 2016?

College Savings Plan for Baby Sam

As I work on figuring out our 2015 savings goals, we know that college savings for Baby Sam is on the list.

We have settled on a 529 Plan rather than a prepaid tuition plan.

The next question is how much to contribute.  $28,000 is the current annual limit if you file taxes jointly, $14,000 if filing singly status before having to do gift tax analysis.

Mr. Sam is in favor of skimping to front load Baby Sam's college fund now and then once Baby is in school dialing back because there is a good chance we will be paying for private school.

I'm not sure where I stand on the issue, but because I manage the finances I prefer more regular and even contributions because its easier to manage.  But, if we contributed $28,000 a year for year one to year five we would end up with $140,000 and that is a huge chunk of money that would then grow over the next 13 years.

Start researching estimated college costs in 2033 and its enough to make your head spin.  $57,000 a year for public, in-state university up to $130,000 a year for private university.  Multiply that by four - five years and you get total costs from $285,000 to $650,000.  Yikes!

However, many experts say that the tuition increases that have occurred in recent years, 5% - 7% increases each year, are simply unsustainable.  So, its quite difficult to know what the real costs will be.  I guess its better to plan high and then be pleasantly surprised, but I don't want to sacrifice retirement savings or other savings to hit an inflated college savings number.  

At present, the 529 plan paperwork is filled out, I've sent off the check for the initial contribution and I have set up bi-monthly electronic contributions at $50.  Not much, but a start while we figure out how much we will be contributing going forward.

Updated Net Worth and Housekeeping

I'm continuing to work on getting our finances back under control. I spent some time this morning working on updating our net worth numbers.  Our net worth is now above the $1.5 million number.

Net Worth IQ web site continues to be flaky, but when its up I prefer to keep my data there.  I've added entries for November 2014 - February 2015 but they are not accurate.  I will be working to add the correct data over the next couple of weeks.

Additional good news, our primary mortgage is now below $220,000.  I will be super excited when its below $200,000 although prepaying the mortgage is unlikely to be something we will be working on any time soon.

In baby news, I opened a savings account at Wells Fargo for Baby Sam for monies received as gifts.  We have been researching college savings plans and at this point we have settled on a 529 plan rather than Florida Prepaid.  More about that research later.

Finally, I am almost done with our 2015 Spending Plan which will influence and direct our 2015 Plan.  More about that later too.

2014 - Final Savings Numbers

(1) Max out 401k(s) -        $22,588    65%  (goal is $35,000)
(2) Max out IRA(s) -         $11,000    100% (goal is $11,000)
(3) Add to e/r fund -          $10,400    104% (goal is $10,000)
(4) Roof project -              $5,000       100%  (goal is $5,000)
(5) Vehicle replacement -  $5,000      100%  (goal is $5,000)
(6) House projects -          $3,000       100% (goal is $3,000)

Total:  $56,988  83%  (Goal is $69,000)

So, we saved almost $57,000 in 2014.  While a respectable number, we missed our goal by $12,000.  Mr. Sam was not eligible for his 401k until midway through the year and that is one of the main reasons that our 401k savings number was reduced in 2014.

We did have some major expenses in 2014 that are not reflected (entirely) in our savings goals.  First, a new car for Mr. Sam which was paid in part with cash.  Second,  a new roof for one of our properties.  The roof was a savings goal, but also cost more than what we saved and we could no longer put the project off.

We also incurred some debt in 2014.  Mr. Sam's new car was paid in part with cash (about 40%) and the rest is loan.  Second, we added to our family in 2014 (which is why I've been away from the blog for so long).  We had considerable expenses related to the conception (via IVF) and related to the nursery and birth (most covered by insurance, but a big chunk that was not).   We also had a major house project prior to the baby arriving.  We are working on paying down the baby debt and it will be part of our 2015 savings/debt killing plan which I am working on creating.

$2 MM

According to today's update, our assets have snuck over the $2 million dollar mark.  While a number is just a number and I recognize that the value of our assets are mostly variable (except for the cash), I always get positive vibes when I hop over one level to the next.

Mr. Sam's 401K

After more than a year, Mr. Sam is finally eligible for his 401k.  And it even comes with a match.  Hooray!

To start, since we are having a year of financial set backs and struggles we have set the contribution amount at a reasonable number.  We will, hopefully increase it as we work it into our budget.

Fidelity Faux Paux

So, yesterday I spent some time on our finances, paying bills, updating our savings chart, updating our net worth numbers, etc.

I was on the Fidelity site to determine if some of my recent limit orders had gone through (trying not to let my IRA money sit idle in cash).  I'm a big fan of Fidelity and, in fact, I've been a Fidelity customer for many years.  I generally have nothing but good to say about them.

But, of course you knew a but was coming, I'm puzzled by something that I just noticed.  When I pull up a statement online (and same for paper, because I checked), my name is nowhere on the statement.  The statement is addressed to my husband (alone).  It lists our various accounts, mine are listed first, I assume because they are older accounts but it doesn't reference ownership.  These are not joint accounts, these are accounts that are individually owned by each of us (we do have a joint trading account) and in fact were established prior to marriage.

Am I bothered by this, yes.  And, I'll tell you why.  While I very much agree that the money on this statement is "ours", if you look at the numbers, I own, individually, the bulk of the money in these accounts.  And that is simply because I've been saving for retirement for a longer period of time.  The statement should be addressed to both of us and the accounts ought to be listed by ownership.

2014 Savings Goal - May Update

(1) Max out 401k(s) -        $10,139   29%  (goal is $35,000)
(2) Max out IRA(s) -         $8,835     80% (goal is $11,000)
(3) Add to e/r fund -          $4,400     44% (goal is $10,000)
(4) Roof project -              $5,000    100%  (goal is $5,000)
(5) Vehicle replacement -  $5             0%  (goal is $5,000)
(6) House projects -          $1,100     37% (goal is $3,000)

Total:  $29,479  43%  (Goal is $69,000)

Can you tell things have been cray-cray for us, no posts in quite some time.  But, surprisingly, when I updated our savings chart today we are generally on track for 2014.

The roof project is done, cost more than $5,000 so counting that goal as completed.  We are making progress on our house project fund, but even with the roof done, we have several house projects that we need to attend to this year that likely will exceed our savings.  Now that the roof project is done, I will switch my auto savings to Mr. Sam's car replacement fund.  My car also has been acting up and I'm going to need to invest a couple of thousand into it in the next couple of weeks.  

As for 401k, I'm maxing mine out.  Mr. Sam will not be eligible for his 401k until September, in the mean time we are putting savings away so he can up his contributions come September.  But, we are behind on that goal.  We are making good progress on our 2014 IRA savings.  

401K Held Hostage

Interesting article from the NY Times about 401k accounts caught up in a company bankruptcy for more than 5 years forcing the employees to face tax penalties when they couldn't withdraw, and to continue working into retirement because they could not access their retirement funds.

Mr. Iyer, who has glaucoma and diabetes, retired last fall. He said he continued working far longer than planned because he could not withdraw any of his retirement savings — 41 years’ worth that he had earned at a variety of companies but had rolled over into his Penn Specialty account. He was also upset by the $49,728 in administrative and legal fees extracted from his account while it was in limbo.   Mr. Iyer said. “It is interesting to note that the fees I ended up paying exceed what Penn Specialty Chemicals contributed on my account. I have learned never to trust a 401(k).”

Scary stuff.  Like most people, my professional career has not been with one company.  Rather, I've been with three companies and during that journey, started 401k accounts with each employer.  My last company, let's call it Company B, had some financial strife and is actually no longer in existence.  Shortly after I left Company B, really shortly, I rolled over my Company B 401k to Company C (my current company).  I departed Company B with a group and some of the folks did, later, have some challenges in rolling over their 401k to Company C.  The reason, like Penn Specialty, Company B ended up in bankruptcy and that delayed the ability of some of my co-workers to roll over those monies.

Now, my first 401k remains with Company A.  The reason I leave it there is because I have access to some very highly rated, and low fee, institutional funds.  However, I have thought about rolling it over to Company C.  Now, after reading this article, it almost seems safer to have more than one 401k account.

2014 Planning - Third Time is the Charm

So, for the third time we are going to plan/try to save $69,000, maybe 2014 will be the year we hit this number.  Now that we have our 2014 total goal number, we have been working on planning.

Some goals are pretty easy to establish.

First, tax advantaged retirement savings.  I will max out my 401k savings, $17,500, in 2014.  We both will max our our non-deductible IRAs for 2014, so that is $5,500 each or $11,000.  We will save $17,500 for Mr. Sam in 2014, that money will be after tax until he is eligible for his 401k in September.  Then we will max out what he can contribute from 9/1/2014 until 12/31/2014 which Mr. Sam thinks will be about $12,000.  So, the monthly savings we do for Mr. Sam's 401k between 1/1/2014 and 9/1/2014 will be used to supplement income for the last quarter when he is putting the bulk of his paycheck into his 401k.  Then, the amount that is left over will be put into our trading account.  While Mr. Sam will not be able to save as much in 401k savings, we will make sure to save at least the same amount in our non-tax advantaged trading account.

(1)  Max out 401ks (goal is $35,000)
(2)  Max out IRAs (goal is $11,000)

As for our IRAs, we have already saved $1800 towards our 2014 goal.

Second, other savings goals.  I probably will maintain the monthly savings already set up which means we would put another $10,000 into our emergency savings in 2014.  I like having money go towards e/r savings.  With our various real estate properties, a health emergency fund makes me happy.  For similar reasons, I probably will keep the $200 a month that goes towards our house account.  With an old house, there are always repairs or projects (last year I imagined plantation shutters, but that project got put off).  This year, we are also likely looking at a roof repair or roof improvement on our carriage house.  Accordingly, I am putting $5,000 into roof project savings.  If the roof project costs less, then we will put that money towards mortgage principal prepayment.

(3)  Emergency account (goal is $10,000)
(4)  Roof fund (goal is $5,000)
(5)  House fund (goal is $3,000)

Third, Mr. Sam is going to need a replacement vehicle within the next couple of years.  So, the last goal for 2014 is car replacement fund (goal is $5,000)

(6)  Car replacement fund (goal is $5,000).

How about you, what are your financial plans and goals for 2014?

NetWorth - Retirement Investment Progress

So, at almost the end of 2013 we have just over $800,000 in total retirement investment accounts which is mostly due to the performance of the market.  $200,000 more and our investments will be evenly divided between real estate and retirement accounts.

Holiday Cheer - 401K Match

For the first time in my corporate career, this year I received a 401K match.  My employer contributed "profit sharing" in the amount of $5,500.  

That was a surprise and certainly welcome holiday cheer at the end of somewhat tough financial year for us (with Mr. Sam's layoff).